ISPs Are Not Required to Search Independently for Potential Infringement

Recently, the Southern District of New York confirmed that a copyright owner bears the sole responsibility for searching the marketplace for evidence of piracy or infringement of its works. In Viacom Int'l v. YouTube, Inc., the court explained that as long as an Internet Service Provider ("ISP") such as YouTube complied with the notice and take down requirements of the Copyright Act (specifically the Digital Millennium Copyright Act, or "DMCA"), it could not be held liable for failing to proactively search for content on its site that might infringe copyrights owned by others. Viacom Int'l v. YouTube, Inc., No. 07 Civ. 2103, 2010 U.S. Dist. LEXIS 62829 (S.D.N.Y. June 23, 2010) (available on Justia.com).

Both parties moved for summary judgment. YouTube argued that the safe harbor of 17 U.S.C. § 512(c) protected it from liability for others' infringing acts. Id. at *8-*9. In turn, Viacom argued that YouTube was liable for intentional infringement of thousands of Viacom's copyrighted works and was not protected by the DMCA's safe harbor rules because 1) it had actual knowledge of the infringement and failed to stop it, 2) YouTube benefited financially from the infringement because of the increased traffic to YouTube's site; and 3) the safe harbor protected those ISPs that only provided storage at the direction of the user. Id.

The court was persuaded that the safe harbor applied and found that the phrases "actual knowledge that the material or an activity using the material on the system or network is infringing" and "facts or circumstances from which infringing activity is apparent" as used in § 512(c) meant "actual or constructive knowledge of specific and identifiable infringements of individual items" and not "general awareness that there are infringements (here, claimed to be widespread and common)." Id. at *15-*16. Ultimately, the court granted YouTube's motion for summary judgment on the basis of the § 512(c) safe harbor and denied all of Viacom's claims that YouTube was liable for direct and secondary copyright infringement. Id. at *45.

In this case, Viacom collected approximately 100,000 videos from YouTube that it claimed to be infringing and sent a single "mass take-down notice" listing each one. Id. at *30-*31. By the following business day, YouTube had removed "nearly all" of the videos identified in the notice. Id. at *31. YouTube's prompt response was apparently key to the court's holding. Id. at *37-*38. (YouTube's current copyright policy (which relies on the § 512(c) safe harbor) can be found here.) Perhaps the court was also persuaded by the potentially daunting task facing an ISP that had "over 24 hours of new video-viewing time . . . uploaded to the YouTube website every minute" if it were required to search proactively for content that potentially infringed others' rights. Id. at *14.

The court evaluated the legislative history of the DMCA and focused on its articulation of a "red-flag" test: "[A] service provider need not monitor its service or affirmatively seek facts indicating infringing activity (except to the extent consistent with a standard technical measure complying with subsection (h)), in order to claim this limitation on liability (or, indeed any other limitation provided by the legislation). However, if the service provider becomes aware of a 'red flag' from which infringing activity is apparent, it will lose the limitation of liability if it takes no action." Id. at *20 (quoting Senate Judiciary Comm. Report, S. Rep. No. 105-190 at 44-45 (1998); House Comm. on Commerce Report, H.R. Rep. No. 105-551, pt. 2, at 53-54 (1998)).

The legislative history further clarified that "a service provider conducting a legitimate business would not be considered to receive a financial benefit directly attributable to the infringing activity' where the infringer makes the same kind of payment as non-infringing users of the provider's service." Id. at *22 (quoting Senate Report at 44-45; House Rep. at 53-54). As a result, the court in the Viacom v. YouTube case concluded that any financial benefit YouTube received did not disqualify it from the safe harbor provisions because even those benefits must be tied to item-specific knowledge. Id. at *40-*41.

Congress similarly provided that the failure to recognize and act on "red flags" would preclude the application of the safe harbor. Id. at *25 ("a service provider would have no obligation to seek out copyright infringement, but it would not qualify for the safe harbor if it had turned a blind eye to 'red flags' of obvious infringement."). Specifically, the ISP is not required to evaluate or reach any conclusion about the potential for infringement of someone else's works. Id. at *26.

Ultimately, the court held that "[m]ere knowledge of prevalence of such activity in general is not enough" to justify imposing liability for indirect copyright infringement on an ISP. Id. at *29. Particularly, imposing liability on the ISP based solely on "knowledge of a generalized practice of infringement in the industry, or of a proclivity of users to post infringing materials . . . would contravene the structure and operation of the DMCA."

The court also rejected Viacom's argument that the take down list (identifying approximately 100,000 claimed infringing videos) was merely "representative" of a larger number of infringing videos to be found on YouTube, and that the take down notice required YouTube to search for other similar works and remove them in order for the safe harbor to apply. Id. at *44-*45. The court opined that "This 'representative list' reference would eviscerate the required specificity of notice . . . if it were construed to mean a merely generic description ("all works by Gershwin") without also giving the works' locations at the site, and would put the provider to the factual search forbidden by § 512(m)." Id. at *44. Instead, take down notices must provide specific locations to the infringing works, whether by providing the precise URL (uniform resource locator, or website address), in order to permit the ISP to react appropriately to the notice and remove the infringing work.

The upshot is this: copyright owners still bear the burden to police the market to find instances of infringement, and cannot abdicate this duty to any of the various ISPs that host "user generated content."

Statutory Language:

The relevant DMCA safe harbor rules that the court considered are contained in 17 U.S.C. § 512(c), reprinted below. There are several other safe harbors that the court did not analyze that can also be found in § 512. They are not reprinted here in the interest of space.

17 U.S.C. § 512(c) Information residing on systems or networks at direction of users.
(1) In general. A service provider shall not be liable for monetary relief, or, except as provided in subsection (j), for injunctive or other equitable relief, for infringement of copyright by reason of the storage at the direction of a user of material that resides on a system or network controlled or operated by or for the service provider, if the service provider--
     (A) (i) does not have actual knowledge that the material or an activity using the material on the system or network is infringing;
          (ii) in the absence of such actual knowledge, is not aware of facts or circumstances from which infringing activity is apparent; or
          (iii) upon obtaining such knowledge or awareness, acts expeditiously to remove, or disable access to, the material;
     (B) does not receive a financial benefit directly attributable to the infringing activity, in a case in which the service provider has the right and ability to control such activity; and
     (C) upon notification of claimed infringement as described in paragraph (3), responds expeditiously to remove, or disable access to, the material that is claimed to be infringing or to be the subject of infringing activity.

(2) Designated agent. The limitations on liability established in this subsection apply to a service provider only if the service provider has designated an agent to receive notifications of claimed infringement described in paragraph (3), by making available through its service, including on its website in a location accessible to the public, and by providing to the Copyright Office, substantially the following information:
     (A) the name, address, phone number, and electronic mail address of the agent.
     (B) other contact information which the Register of Copyrights may deem appropriate.
The Register of Copyrights shall maintain a current directory of agents available to the public for inspection, including through the Internet, in both electronic and hard copy formats, and may require payment of a fee by service providers to cover the costs of maintaining the directory.

(3) Elements of notification.
     (A) To be effective under this subsection, a notification of claimed infringement must be a written communication provided to the designated agent of a service provider that includes substantially the following:
          (i) A physical or electronic signature of a person authorized to act on behalf of the owner of an exclusive right that is allegedly infringed.
          (ii) Identification of the copyrighted work claimed to have been infringed, or, if multiple copyrighted works at a single online site are covered by a single notification, a representative list of such works at that site.
          (iii) Identification of the material that is claimed to be infringing or to be the subject of infringing activity and that is to be removed or access to which is to be disabled, and information reasonably sufficient to permit the service provider to locate the material.
          (iv) Information reasonably sufficient to permit the service provider to contact the complaining party, such as an address, telephone number, and, if available, an electronic mail address at which the complaining party may be contacted.
          (v) A statement that the complaining party has a good faith belief that use of the material in the manner complained of is not authorized by the copyright owner, its agent, or the law.
          (vi) A statement that the information in the notification is accurate, and under penalty of perjury, that the complaining party is authorized to act on behalf of the owner of an exclusive right that is allegedly infringed.
     (B) (i) Subject to clause (ii), a notification from a copyright owner or from a person authorized to act on behalf of the copyright owner that fails to comply substantially with the provisions of subparagraph (A) shall not be considered under paragraph (1)(A) in determining whether a service provider has actual knowledge or is aware of facts or circumstances from which infringing activity is apparent.
          (ii) In a case in which the notification that is provided to the service provider's designated agent fails to comply substantially with all the provisions of subparagraph (A) but substantially complies with clauses (ii), (iii), and (iv) of subparagraph (A), clause (i) of this subparagraph applies only if the service provider promptly attempts to contact the person making the notification or takes other reasonable steps to assist in the receipt of notification that substantially complies with all the provisions of subparagraph (A).

17 U.S.C. § 512(c) (emphasis added).

Supreme Court Issues Opinion in Bilski v. Kappos Case

Patent law is beyond my expertise, but even I am aware that the Supreme Court's June 28 decision relating to the patentability of certain business methods is an important development that should be acknowledged here. However, I defer to my colleague Clark Jablon's summary of the case and its impact on the patent community, which can be found on my firm's website. I encourage you to read it and contact him if you have any questions or concerns about this area of patent law.

IPEC Releases Joint Strategic Plan on Intellectual Property Enforcement

Last week (on June 22), the Intellectual Property Enforcement Coordinator (IPEC) Victoria Espinel published the Joint Strategic Plan mandated by the PRO-IP Act. (For prior posts about the IPEC's duties and responsibilities, see my June 1, 2010 post.) A full copy of the Plan can be found on the IPEC's site and remarks about the program can be found on the White House's Blog, (IPEC's announcement of the Plan's availability and some general remarks about the program).
This report outlines 33 "enforcement strategy action items", divided into six categories: 1) leading by example; 2) increasing transparency; 3) ensuring efficiency and coordination; 4) enforcing our rights internationally; 5) securing our supply chain; and 6) building a data-driven government. Listed below are just some of the highlights – not a full list or explanation of each of the 33 action items.

• A "government-wide working group" will be established to determine how best to ensure that the U.S. government does not obtain counterfeit parts in connection with its government contracts. This group would be required to submit a formal report within 180 days after its first meeting that details its findings and issues remaining for determination. (Page 7)
• The U.S. government "will review its practices and policies" to ensure that it is not purchasing pirated software so that it can "set an example to our trading partners." In this regard, the IPEC will propose legislative amendments necessary to implement a 1998 Executive Order. (Page 7)
• Enhance communications with rightsholders and victims of IP infringement/crimes/piracy, to inform them about how to report IP crime, which types of cases are generally accepted by the U.S. government for prosecution, and the types of information victims could provide to support an enforcement action. (Page 8-9)
• The U.S. Trade Representative is currently responsible – through its Special 301 process – for providing a Notorious Markets list (defined in the Plan as "a combination of examples of Internet and physical markets that have been the subject of enforcement action or that may merit further investigation for possible intellectual property infringements.") (Page 9)
• The U.S. government will create a database (or combination of databases that function as a unitary whole) that contains information about IP cases, case-specific information about pending investigations. The database "need not" include sensitive IP information such as national security information, trade secrets or grand jury investigation that cannot be disclosed under the Federal Rules of Criminal Procedure (Rule 6(e)). (Page 11)
• The U.S. Customs and Border Protection will provide samples of allegedly infringing products to rightsholders for testing, provided that a bond is posted for each sample "to cover the potential loss or damage to the sample if the products are ultimately found to be non-infringing." In this Plan, the IPEC described a streamlined bond option that allows the posting of a single bond to cover multiple samples released by CBP. (Page 17).
• The U.S. government broadly encourages cooperation in the private sector to police infringing activity and to enforce existing IP rights: "the Administration encourages actions by the private sector to effectively address repeated acts of infringement, while preserving the norms of legitimate competition, free speech, fair process and the privacy of users." (Page 17)
• Google, Yahoo and Bing were lauded specifically for their development of "voluntary protocols to prevent the sale of sponsored results for unlawful businesses selling counterfeit medications on-line." Their list of so-called "unlawful businesses" is based, in part, on verification by the National Association of Boards of Pharmacy's Verified Internet Pharmacy Practice Sites and/or certifications from the original manufacturers of legitimate and FDA-approved pharmaceuticals. (Page 18) – See also Pharmaceutical Security Institute (PSI) and the Partnership for Safe Medicines. (Page 53).
• The IPEC will initiate and coordinate a process of reviewing existing IP laws and their penalties (whether civil or criminal) to determine whether their reach is far enough, or whether there are modifications required to "enhance enforcement efforts." (Page 19).

The Plan also summarizes various Federal Agencies' enforcement activities in 2010 (to date) (Page 35).
Please comment below about other portions of the Plan if there are other points that should not be overlooked here.

New Design

As you can see, the design of this blog has changed, mostly so that more of the screen is useable. If you have comments or concerns about the new layout, or find that any part of it is not user-friendly, please comment below so that I can try to address it.

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